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RULE §25.10Premium Refunds

(a) If the insurance premium finance company notified the insurer of the existence of the premium finance agreement pursuant to the Insurance Code, Article 24.22, then the entire unearned premium owed the insurance premium finance company (in trust for the insured) shall be paid within 60 days from the date notice of cancellation was received. If an audit of the insured's records is required to determine the amount of premiums, the time shall be extended to 90 days. If the audit is delayed because of acts of the insured, the 90-day period shall be extended to provide a reasonable time to conduct the audit and determine the amount of premiums earned.

(b) If the insurance premium finance company does not give notice of the premium finance agreement to the insurer (as provided by the Insurance Code, Article 24.22), then the total unearned premium refund shall be paid directly to the insurance premium finance company within 120 days from the effective date of the cancellation, unless the insurer has already refunded the unearned premium to the insured due to cancellation.

(c) The insurance premium finance company shall return any monies due to the insured within 20 days from the date returned unearned premiums are received from the insurer or agent.

(d) This section shall apply to cancelled policies written through or in a statutory plan or pool, except that the agent who applied for the statutory plan or pool policy on behalf of the insured shall be solely responsible for the payment of any unearned commission owed to the insurance premium finance company unless the insuring company tenders the entire unearned premium including unearned commission.

Source Note: The provisions of this §25.10 adopted to be effective May 17, 1995, 20 TexReg 3337.

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